On Wednesday one of our agents, Ben Weeding attended the BasisPoint Aust-China Property Developers and Investors Conference at The Westin in Sydney. It was well-attended with 300 delegates and participants from all parts on the property and financial industry and was particularly interesting when it came to the influence of the Chinese market on Australian property.
Here are some of the more interesting themes that were noted on the day by Ben:
From organiser David Chin on “the Chinese and their impact on the Australian Property market;”
– Chinese investment interest remains high with little alternatives for Chinese nationals to invest in. Ongoing currency (CNY) weakness, superior Australian lifestyle and possible future migration will also be determining factors
– Highlighted a significantly growing Chinese middle class and HNW individuals growing 10-15%/yr. HNW currently sit at 1m people vs 200K in Australia.
– Tourism and Student education to remain a powerful influence.
– Australian Banking exposure to Chinese investors is only 1-3% of their book.
From the first panel discussion that included several GM’s/CEO’s of Chinese developers in Australia;
– The election remains a key uncertainty with due diligence on any possible development site on hold until after the election.
– Despite the legislation stating that up to 100% of all stock can now be sold offshore, delegates commented only 20-30% of stock is being sold this way with the rest being sold domestically.
– The supply/demand balance of apartments in Australia still looks good.
– They are aware of possible settlement risk, but are preparing for this possible event.
The second panel discussion consisted of the Heads of 3 Property Fund Management firms in Australia. They highlighted:
– Chinese fund managers are underweight property globally. They are allowed to reach 15% of their portfolios but are currently sitting at ~2%.
– The Goldfields House redevelopment in Sydney will see apartments sell at $40,000/sqm which will set a new luxury standard price in the city.
– Second tier developers are the ones who are starting to feel some pain after they paid too much for some sites, running into higher building costs, and banks pulling back on funding on specific projects.
– Most interestingly, they see the best opportunities in the market are; hotels, childcare, and mixed-use development. House and land packages are surprisingly still viewed as a great opportunity also, with both Sydney & Melbourne seeing population growth at >100,000 people per year.
The last panel spoke about Development issues in Australia for foreign developers. The panel highlighted:
– Integrity of brand name being paramount for those foreign developers in Australia. Many see a long term future here.
– Chinese buyers like Australian buyers look for a quality builder and are in the business of trying to make money and thus paying the right price is important.
The most interesting influencer on this last panel was Esther Yong, the founder of www.acproperty.com.au AC Property markets off-the-plan properties for sale in Australia to Chinese buyers. The website is in Chinese and my Mandarin is unfortunately not up to scratch 😉 However, there were two businesses here to highlight:
Firstly, the website consists of the obvious selling portal for off-the-plan properties;
Secondly, and probably of greater value, consisting of a data referencing business on Chinese buyers and their tastes via enquiries and clicks.
Esther mentioned that the data they have is restricted to the properties that they do sell, however, I would envisage this changing with further marketing investment in the business. Esther also commented with tighter restrictions on foreign lending for residential property, many clients were asking more about commercial property investment.
For more information on how you can take advantage of the next opportunities in the property market you can contact Ben directly on 0428 559 308 or email him at email@example.com.